Close review on Singapore budget financial year 2017/2018.
Singapore economic growth was 2% in the year 2016. That figure was similar in 2015, with some financial sectors outdoing other. This year’s budget was delivering amid significant global economic shift and geopolitical uncertainties. The focus was the advanced Singapore economy with the aim of increasing productivity using rapid technological advances which is critical to avoid disrupting in business and jobs.
2017 budget provides both near-term and long-term support measures, with a strategic approach to address sectors that need boosting. Some of the highlights include helping companies and workers, water price increase and support for households and young families.
Regarding water prices, water tariffs will increase by 30% by 2018. This price increase has been set into two phases, beginning July 2017 and July 2018. Hence, this change comes from unpredictable water supply from Johor and local reservoirs. Starting those dates more water will be source from costlier waters-desalination and Newater.
There is an increase in taxes on emissions. A carbon tax of $10-$20/ ton of greenhouse will be placed on power stations and other major carbon producers. This new law is expected to be put in force begging 2019 after consultations with the public and responsible industries. Revenue collected from the tax will be channeled to fund measures by industries to cut down the emissions. There will be new emission scheme for vehicles too. Beginning in 2018, vehicles will be considered among the four top producers of carbon dioxide. When imposed, change in diesel prices will come into effect. The government plan to introduce a volume based duty of $0.10 per liter in vehicles diesel, diesel components, and industrial diesel. This is to encourage users to reduce diesel consumption.
Motorcycle Registration Fee
Everyone purchasing expensive motorcycle will pay more. Singapore is experiencing a rise in riders of luxury motorcycles. On top of the current cost, two more tiers will be added. More than half of the bikes riders are expect to continue paying the current rate of 15%. The Additional Registration Fee for motorcycles with a $5,000 market value will remain at 15%. The next fee will be subject to the increase rate 50% while the remaining value, more than $10,000 will be tax at a 100% rate.
First-time applicant HDB
To support households, married couples looking for second-hand flats will pay less. The first-time applicant buying a four-room house will get $50,000. This up from $30,000, while those looking to buy a five-room flat will get$40,000. Together with Proximity Housing Grant and Additional CPF Housing Grant, married couples will in total receive up to $110,000 in subsidies. The AHG grant applicants up to $40,000 while PHG provides an extra $20,000 for those living close to their parents. This plans us to sustain Singapore moment of a recent social policy aimed at increasing help for families and vulnerable groups, strengthening community partnership. Such measure will not only be seen in housing. However, in other areas such as infant care and education bursaries.
There will be less income tax, down to 20% capped at $500. This will cost the government $385 million.
Business in Overseas
With the aim of help Singaporeans open more business overseas. The government of Singapore will commit $600 million to an International Partnership Fund. Hence, this is co-invest with owners of the firms. The IPF will be under a unit of Temasek Holdings which is a top Singapore’s state investment company. Also, the government has plans to enhance its Internationalism Finance Scheme with the aim of enabling firms to tap the growing market in emerging Asian economies.
To help the local students and professionals go global, there will more support for fresh grad and workers under Global Innovation Alliance. In fact, the scheme will help students in local universities get better work experience by facilitating a partnership between Singapore and foreign firms which project to expanding in the region. Such a platform will help young minds connect with entrepreneurs and business owners, mentors, and investors abroad.
Attach and Train
In a bid to help workers, the government has set aside funds for “Attach and Train” program which is aimed to help workers horn their skill and find jobs in the new industries. Such workers will get free training and later internship in new sectors and where companies are not ready to start hiring. To boost the morale of worker in various industries. There will be a rise in wages under existing measures such as a Career Support Program and Work Trail program.
2017 budget aim
The 2017 budget aim in taking a further step on the economic transformation project. Some of the measures include strengthening corporate capabilities, promoting digitization and enhancing the capacity of data and cybersecurity. There are also plans to encourage innovation by financing local companies with the right infrastructure overseas. As part of the holistic plan to develop a vibrant and connect city, Invested in crucial economic sectors will be made.
Another measure set to receive the fund to establish a caring and inclusive society is a master plan to integrate persons with disabilities into the Singapore workforce. Those who cannot work will receive support by being provided with caregivers. Besides that, there will be more fund in the strengthening of mental health with a joined effort from voluntary welfare organizations. Social activities such as sports and arts will also get more resourced.
From the budget, the government also plan to continue its effort in emphasizing value-for-money and driving innovation. Almost all ministries will have to deal with a 2% cut in the budget caps with the money used to implement cross-agency projects. Besides that, the government will represent an investment in line with Singapore master plan of economic transformation and social resilience.
To ensure that all the above measures are implement the government insists on its need to strengthen revenue base which will help cover its growing financial expenditures. This means most fields will experience raised tax rates to ensure that current projects are sustainable to the benefit of generation to come.
From the budget, it’s clear that Singapore government insist on moving forward together despite rising uncertainties and the rapidly changing world. Besides that, this can be done by fostering strong partnership among all stakeholders in the economy.
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